Talking Points:
Aussie, NZ Dollars Rise as Australian 3Q Capex Data Tops Expectations
Japanese Yen Higher as Nikkei 225 Drops, Fueling Safe-Haven Demand
Euro Vulnerable with German CPI, Draghi Commentary in the Spotlight
The Australian and New Zealand Dollars outperformed in overnight trade, rising as much as 0.5 percent apiece against the majors. The move followed a supportive Australian Capital Expenditure figures that showed spending on fixed assets unexpectedly rose 0.2 percent in the third quarter. Economists were forecasting a decrease of 1.9 percent ahead of the release.
An increase in capex outlays bodes well for Australian economic growth, which is in turn supportive for RBA interest rate bets. It is likewise positive for New Zealand’s output and monetary policy prospects considering Australia is the island nation’s largest export market, accounting for over 20 percent of cross-border sales.
The Japanese Yen likewise advanced, adding as much as 0.4 percent on average against its leading counterparts. The move paced a drop in Japan’s benchmark Nikkei 225 stock index, pointing to risk aversion as the catalyst behind demand for the safety-linked currency.
Looking ahead, November’s preliminary German CPI report is in focus in European trading hours. The baseline year-on-year inflation rate is expected to decline to 0.6 percent, the lowest in nearly five years. A soft outcome may fuel speculation about ECB stimulus expansion, weighing on the Euro.
The single currency may find added downward pressure from scheduled commentary by ECB President Mario Draghi. The central bank chief may echo yesterday’s remarks from Vice President Vitor Constancio, who said doubts about the potency of QE are “not well founded” and alluded that the decision to buy sovereign bonds could be made as soon as the first quarter of next year.
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Asia Session
GMT
CCY
EVENT
ACT
EXP
PREV
21:45
NZD
Trade Balance (NZ$) (OCT)
-908M
-642M
-1367M
21:45
NZD
Trade Balance YTD (NZ$) (OCT)
-107M
183M
633M
21:45
NZD
Imports (NZ$) (OCT)
4.94B
4.60B
4.98B
21:45
NZD
Exports (NZ$) (OCT)
4.03B
3.85B
3.61B
0:00
AUD
HIA New Home Sales (MoM) (OCT)
3.0%
–
0.0%
0:30
AUD
Private Capital Expenditure (3Q)
0.2%
-1.9%
1.6%
1:30
CNY
Industrial Profits (YoY) (OCT)
-2.1%
–
0.4%
2:00
NZD
RBNZ Net Currency Sales (OCT)
-1M
–
-30M
European Session
GMT
CCY
EVENT
EXP
PREV
IMPACT
8:15
CHF
Industrial Production (YoY) (3Q)
–
3.1%
Low
8:55
EUR
German Unemployment Change (NOV)
-1K
-22K
Medium
8:55
EUR
German Unemployment Rate s.a. (NOV)
6.7%
6.7%
Medium
9:00
EUR
ECB’s Constancio Presents FSR
–
–
Medium
9:00
EUR
Eurozone M3 s.a. (YoY) (OCT)
2.6%
2.5%
Low
9:00
EUR
Eurozone M3 s.a. (3M) (OCT)
2.4%
2.1%
Low
9:30
GBP
Lloyds Business Barometer (NOV)
–
35
Low
10:00
EUR
Eurozone Economic Confidence (NOV)
100.3
100.7
Low
10:00
EUR
Eurozone Industrial Confidence (NOV)
-5.5
-5.1
Low
10:00
EUR
Eurozone Consumer Confidence (NOV F)
-11.6
-11.6
Low
10:00
EUR
Eurozone Services Confidence (NOV)
4
4.4
Low
10:00
EUR
Eurozone Business Climate Indicator (NOV)
0.02
0.05
Low
11:30
EUR
ECB’s Draghi Speaks in Helsinki
–
–
Medium
12:00
EUR
German GfK Consumer Conf (DEC)
8.6
8.5
Low
12:15
EUR
ECB’s Weidmann Speaks in Frankfurt
–
–
Low
13:00
EUR
German CPI (MoM) (NOV P)
0.0%
-0.3%
High
13:00
EUR
German CPI (YoY) (NOV P)
0.6%
0.8%
High
13:00
EUR
German CPI – EU Harmonised (MoM) (NOV P)
0.0%
-0.3%
High
13:00
EUR
German CPI – EU Harmonised (YoY) (NOV P)
0.5%
0.7%
High
Critical Levels
CCY
Supp 3
Supp 2
Supp 1
Pivot Point
Res 1
Res 2
Res 3
EURUSD
1.2318
1.2406
1.2456
1.2494
1.2544
1.2582
1.2670
GBPUSD
1.5505
1.5632
1.5712
1.5759
1.5839
1.5886
1.6013
— Written by Ilya Spivak, Currency Strategist for DailyFX.com
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